NSW government rejects $38m bid for Pasminco smelter site
A New York-based investment firm claims the NSW government knocked back its offer for a development near Lake Macquarie worth significantly more than the closest offer.
A New York-based investment firm says the NSW government knocked back its offer for a real estate development site near Lake Macquarie despite it claiming it was “significantly” higher than the eventual buyer.
Avenue Capital, which manages about $US10bn ($14bn), had told the Hunter & Central Coast Development Corporation it was prepared to pay up to $38m for the property located on the former Cockle Creek Smelter.
Instead, the government-owned HCCDC is expected to announce the sale of the property to Sydney-based Green Capital on Friday.
The Pasminco site has had a tumultuous history, with the smelter built in 1896 causing the area around northern Lake Macquarie to become heavily polluted. Operations at the site — known as Boolaroo — ceased in 2003 but it remained hazardous until recently when it was remediated and acquired by the government for redevelopment.
The Planning Department previously scuttled plans to sell the site after an impasse with the site’s administrator, Ferrier Hodgson, over who would pay for the containment of 1.9 million cubic metres of hazardous waste.
Correspondence obtained by The Australian shows Avenue director William Chung requested it be given a month to conduct due diligence and decide whether to make an offer.
“We wish to reiterate Avenue’s interest in pursuing a transaction with the HCCDC in respect of Lot F and Avenue’s willingness to submit an offer of up to $38m that would provide significantly greater value to HCCDC than the offer we understand is currently under consideration by HCCDC,” Mr Chung wrote on July 23.
An earlier letter from Avenue, on July 9, claimed it understood “that the previously negotiated price with Green Capital (over three years ago)” was $14m. “Based on Avenue’s professional advice and assessment, we would be prepared to submit an offer to government in the range of $32-$38m,” Mr Chung wrote.
According to leaked correspondence, however, the HCCDC told Mr Chung that Avenue — and its subsidiary Fiddletown Investments — had “not provided any evidence that you meet the statutory criteria and as such we are unable to deal with the subject matter of your letter any further”.
The Australian understands Green Capital’s offer has increased significantly since the earlier $14m bid.
Green Capital could not be reached on Thursday.
An HCCDC spokeswoman said legislation allowed the agency “to directly deal with parties that had formerly been in negotiation with the site’s administrator, to best achieve outcomes in line with government’s objectives for the site”.
“The act enabled HCCDC to direct deal with parties that had formerly been in negotiation with the site’s administrator, to best achieve outcomes in line with government’s objectives for the site,” the spokeswomen said.
An Avenue spokesman said the company “had hoped the government would have run an open and transparent process to secure the best outcome and value for the community”.
“We’d like to work with the government and the community and bring our significant resources to invest in this area to deliver something special,” he said.
More Coverage
Uni drop-out rates hit record high for Australian students
Domestic students are dropping out of their degrees at record rates. See which courses are the hardest hit.
IMF inflation warning: World goes low as we stay high
Australia’s run of high inflation is on track to exceed all advanced economies except Slovakia’s, according to new IMF forecasts that will increase pressure on the Albanese government and the Reserve Bank.